KEY POINTS:
While some in the finance industry are fighting to survive, one company is eyeing up acquisition opportunities and planning product expansion.
GE Money is positioning itself to pick up assets left over from the fall-out in the sector. GE Money is New Zealand's largest consumer finance company, backed
by its global GE parent,
GE Australia and New Zealand CEO Steven Sargent would not talk about any specific targets but said the company had a team of people on the lookout for potential takeovers.
"We are always chasing opportunities. We can't speak about any specific targets. But there are plenty of opportunities out there."
GE Money is no stranger to acquisitions. It entered the New Zealand market in 1999 with the purchase of consumer finance group Avco Financial Services. Three years later it bought AGC Finance. Since then it has picked up Wizard Home Loans and car-leasing company Custom Fleet.
Sargent, who is based in Sydney and works closely with New Zealand managing director Greg White, believes the finance company collapses should come as no surprise.
"Wherever there is uncertainty and dislocation in the capital markets, there will be a flight to quality." Sargent said.
"There are around 125 finance companies in New Zealand, 70-odd are funded through mum and dad investors. With a population of just four million, New Zealand is over supplied."
GE Money does not fund itself from local investors but has the backing of its parent company which has a triple A rating. The New Zealand company is now pushing this rating through all its advertising.
"A year ago our triple A rating was not worth a lot, anyone could raise money, today it really means something," said Sargent.
However, the business has not been immune to the global credit crunch.
White said there had been a softening in the car lending market and competition was now tougher in mortgages and personal loans.
"Banks are increasingly playing in territory that has been serviced by the consumer finance industry."
However, he said, late payments on loans remained at an all-time low.
Sargent predicted commercial finance would be the big winner for the company over the next few years.
"We see a lot of growth on the commercial side of the business on the back of a lot of infrastructure development going on in New Zealand at the moment. We are predicting a 40 per cent year on year growth there and that's off a high base."
In New Zealand GE's main areas of business are consumer and commercial finance.